Freeport suspends Indonesia mine after tunnel collapse

JAKARTA Wed May 15, 2013 11:23am EDT

1 of 3. Chief Executive of PT Freeport Indonesia Rozik Soetjipto gestures during a news conference in Jakarta May 15, 2013.

Credit: Reuters/Beawiharta

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JAKARTA (Reuters) - Freeport-McMoRan Copper & Gold Inc halted operations at the world's second largest copper mine in Indonesia on Wednesday as rescue workers scrambled to find 25 workers caught underground in a tunnel collapse a day earlier.

The head of Freeport Indonesia said he would travel to the remote West Papua site later on Wednesday to assess rescue operations and decide on when to resume production at the Grasberg mine, which also holds the world's largest gold reserves.

Thirty-nine workers were attending an underground training class near the mine when a tunnel collapsed on them early on Tuesday morning, the company said. Rescue crews evacuated 14 people, four of whom died, the company said.

The Grasberg mine, which employees more than 24,000 workers, was not significantly affected, but production was suspended to pay homage to those involved in the accident.

"There is no direct impact on our operation but as a sign of sympathy we have suspended the operation," Rozik Soetjipto, president director of Freeport Indonesia, told reporters. "I will go to the site tonight and from there we can decide what is the next step."

Rescuers were using jacks, saws and other hand tools to free the remaining workers, as the tight space in the collapsed underground tunnel prevented them from using heavy earth-moving equipment, the company said.

"We may have a different situation tomorrow. The rescue team is working 24-hours," said company spokeswoman, Daisy Primayanti.

The cause of the accident was still unclear. Freeport Indonesia was not allowing journalists access to the site and details of the collapse itself and the rescue efforts were scant. The training tunnel was located outside the mining area and around 500 meters from the entrance of the Big Gossan mine.

The company was also reviewing other underground structures at the mine to ensure they were safe.

Freeport Indonesia's sales are expected to reach 1.1 billion pounds of copper and 1.2 million ounces of gold in 2013, up 54 percent and 31 percent over 2012 figures, respectively, as mining moves into higher ore grades.

The tunnel collapse is one of a number of worker-related incidents at the Papua mine in recent years, where a separatist movement has long pushed for a greater share of resource revenues. Mining contributes around 12 percent to Indonesia's economy.

(Editing by Patrick Graham)

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